Indian equity markets opened 0.5 per cent lower amid fears that the continued surge in covid-19 cases may hit economic recovery. The benchmark Sensex was 0.49 per cent lower at 47844 points, while Nifty declined 0.42 per cent to 14346 points. Local equity markets also fell tracking global equities. Asian stocks weakened following broad-based decline in the US as investors mulled a proposal for higher taxes on the wealthy to help pay for US President Joe Biden’s social plan.

“Domestic equities do not look to be inspiring at the moment. Sharp rise in covid-19 cases across the country and enhanced mobility restriction imposed by a number of states are expected to remain as key overhangs for the market. This has certainly started posing as a threat to corporate earnings recovery,” said Binod Modi, head strategy, at Reliance Securities.

India added more than 3.3 lakh cases for the second consecutive day with Maharashtra recording 67,013 new cases on Thursday.

“We believe market is expected to remain volatile until we see a reversal in cases. Given, enhanced economic restrictions imposed by states and government’s continued focus to increase supply of vaccines and allowing vaccines at private hospitals should be able to check spread of coronavirus in coming weeks”, Modi added.

Rising covid-19 cases constitute the single biggest challenge to economic recovery, the Reserve Bank of India governor Shaktikanta Das told the monetary policy committee earlier this month, according to the minutes released on Thursday. Meanwhile, Fitch Ratings has affirmed BBB- sovereign rating for India with a negative outlook, saying that the second wave of novel coronavirus may delay the country’s economic recovery.